Downturn chance for Fort McMurray to reset boom-bust economy

'We won't let each other fail,' says Mayor Melissa Blake

In just one season, greenhouse owner Brad Friesen has switched his business into survival mode, clawing back significantly on both overtime and staff.
(CBC)

Andrea Huncar Reporter

Andrea Huncar is an award-winning journalist based in Edmonton. She has also reported from Saskatchewan, Toronto and East Africa. Email: andrea.huncar@cbc.ca Twitter: @andreahuncar

The thought that his family business could become another casualty of collapsing oil prices weighs heavily on Brad Friesen.

"I would hate to be a third generation that follows true to the fact that I've ruined Dunvegan Gardens," Friesen said from his bright, airy greenhouse in Fort McMurray.

"My grandfather started it, so I'd hate to be the one that loses it."

Friesen expanded operations from Peace River in 2002, starting out with a greenhouse and a handful of landscapers. Last year was his best yet. He needed 95 seasonal staff, working upwards of 60 hours a week, to get all the work done.

But in the short span of a season, a sputtering economy has forced Friesen into survival mode, clawing back significantly on both overtime and staff.

Cutbacks are hitting all sectors of Fort McMurray1:39

"In order to weather the storm, we're just going to have to work a little harder, work a little smarter," said the father of two.

He can't help but wonder what the future holds for his children in Fort McMurray.

"I'll support them in whatever they do. But if they decide to carry on, hopefully we've got a better economy for them."

In a city widely seen as Canada's economic ground zero, Friesen is just one of the many struggling to make it through a downturn that shows no signs of letting up.

Strategies vary. One local restaurant simply asked for help.

During 23 years, The Fish Place has seen its share of good and bad times. In July 2014, the typical evening line-ups out the door came to an abrupt end. A year and a half later, with no signs of relief, the restaurant appealed to the community.

"The oil crisis has taken a heavy toll on our business," read a January Facebook post. "We are pleading to you to please come and see us, we really need you to survive."

Karl Paetschke, 70, described social media as something "totally alien" to him, but he's happy it paid off. The post he and his daughter sent out was shared more than 1,300 times. The restaurant is busy again. At least two families said they chose to eat at The Fish Place because of the Facebook message.

Customer slowdown started in June 20140:54

"I'm very thankful to the people of Fort McMurray to come and support us," said Paetschke, who is also pleased to see so many new and younger faces, which he credits to social media.

"They're fantastic people here. They responded and still do."

'We won't let each other fail'

It's a sentiment shared widely among locals, all the way up to the mayor.

"It's resilience, perseverance and that whole community spirit that says we will not let this fail, we won't let each other fail," said Melissa Blake, pointing to Fort McMurray's charitable, giving spirit.

While Blake expressed deep concern for those struggling, she said the prolonged slowdown is forcing something needed in the region: the reset of an economy that was "beyond what was rational."

Blake pointed to the high and unsustainable cost of labour, driven up by fierce competition, and daily living allowances that saw rents soar beyond what many could afford.

"We've got to come back into a more realistic realm of cost of living for people," said Blake. "That is going to be one of the things that will make us more resilient. The price of oil always goes up and down, but when we go down we seem to have to learn the same lessons over and over.

"We have got to start being more reasonable about our expectations and how we serve the industry that's here. It's a big industry and there's a lot opportunity, but we've got to make sure that when prices go low we're not all on the bubble again."

'No easy solution'

In the meantime, Blake said the municipality has a "tremendous amount" of shovel-ready projects that could possibly qualify for some of the $700 million in federal infrastructure funding set to come to Alberta.

"We understand it's very difficult for the people of Fort McMurray," Premier Rachel Notley said in an interview this week with CBC News. "There's no easy solution but the government is fully aware that we need to do everything we can to support families."

Notley said $124 million will be spent on flood mitigation efforts, which would also create jobs. The province will also roll out economic stimulus plans in the coming months.

In the short term, Notley said her government will push Ottawa "very aggressively" for changes to Employment Insurance, both eligibility and the duration of claims.

"Obviously, the most important thing is we're going to continue to make the case in every forum possible that the biggest and most important economic support strategy that the province of Alberta and the people of Fort McMurray could benefit from is action on getting access to tidewater through a national energy infrastructure and through pipeline," said Notley, who plans to visit Fort McMurray in the coming weeks to meet with Blake.

Chamber of Commerce president Nick Sanders said the slowdown is an opportunity to address issues that have long plagued Fort McMurray, such as transportation, health care and getting the province to release more land for development.

He's pleased the province's recent royalty review acknowledged the socioeconomic consequences of a city overburdened by the rapid pace of oil development, and agrees with its recommendation that all three levels of government, industry and other stakeholders renew their commitment to work together.

"We need to work better collaboratively. We need to figure out what's important for all of us and just start knocking them off," said Sanders.

"This is an opportune time for us to get ready for when oilsands comes back, and yes, we believe it will come back. So this is a great time for us to address some of those areas of concern."

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